Download Ch 9

Manage the Product
Chapter Nine
Chapter Objectives
 Explain the different product objectives and
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strategies a firm may choose
Understand how firms manage products
throughout the product life cycle
Discuss how branding strategies create product
identity
Explain how packaging and labeling contribute
to product identity
Describe how marketers structure organizations
for new and existing product management
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Real People, Real Choices:
Decision Time at General Corporation
 How should General Mills position the
Fiber One cereal brand in order to
reinforce a consistent and desirable
brand meaning?
• Option 1: Own the position of “Fiber
Superiority”
• Option 2: Own the position of “Great
Tasting High Fiber”
• Option 3: Own the position of
“Digestive Health”
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Figure 9.1
Steps to Manage Products
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Figure 9.2
Objectives for Single and Multiple
Products
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Objectives and Strategies for
Individual Products
 Objectives and strategies for individual
products:
• Successful introduction of new
products
• Taking regional products national
• Breathing new life into mature products
while maintaining brand personality
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Importance of Product Planning
New products owe their success to well-executed
product planning and management.
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Objectives and Strategies
for Multiple Products
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Product line:
Firm’s total product offering designed to
satisfy a single need or desire of target
customers
Product line strategies:
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Cannibalization is a risk
• Full-line vs. limited-line strategies
• Upward, downward, or two-way line stretch
• Filling out or contracting a product line
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Objectives and Strategies
for Multiple Products
 Product mix strategies:
The total set of products a firm offers
for sale
 Product mix strategies:
• Width of product mix must be
considered
• Product lines in mix usually have some
things in common
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Quality as a Product Objective:
The Science of TQM
 Product quality is
often an objective
 A philosophy of
total quality
management
(TQM) can help
achieve quality
objectives
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Quality Guidelines
 ISO 9000:
• Standards for quality management
 ISO 14000:
• Environmental management
 Six Sigma methodology:
• Process allowing no more than 3.4
defects per million (getting it right
99.9997% of the time)
Watch a YouTube video: TQM at Motorola
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Figure 9.3
Product Quality
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Figure 9.4
The Product Life Cycle
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Figure 9.5
Marketing Mix Strategies Through
the Product Life Cycle
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Introduction Phase of PLC
New products that are
offshoots of well-known
brands have an advantage.
Many products don’t make
it out of the introduction
phase; poor or insufficient
advertising is often the
cause.
New product failures
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Introduction and Growth Stages
 Growth stage of the PLC
• The product is accepted and sales
rapidly increase
 Maturity stage of the PLC
• Sales peak, profit margins narrow
 Decline stage of the PLC
• Sales decrease as
customer needs
change
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Marketing Mature Products
Marketers need to keep
giving consumers new
reasons to buy products in
the mature stage
This may be accomplished
by finding new uses for an
existing product, moving
into new markets, changing
the product’s attributes or
by introducing variations to
keep consumer interest
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Creating Product Identity:
Branding Decisions
 Brand:
A name, term, symbol, or
any other unique element
that identifies one firm’s
product and sets it apart
from the competition
What Brands Do The Logos Represent?
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What’s in a Name or Symbol?
 A “good” brand name:
• Maintains relationships with customers
• Positions a product by:
Portraying
an image, or
Describing how the product works
• Is easy to say, spell, read, and remember
• Fits the target market, product benefits,
customer’s culture, and legal
requirements
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It’s Debatable
Class Discussion Question
How do V8 and
the Skinny Cow
Truffle Bar
brand names
stack up against
the criteria that
distinguish a
“good” brand
name?
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Trademarks
 Trademark
The legal term for a brand name, brand
mark, or trade character
• Trademarks legally registered by a
government obtain protection for
exclusive use in that country
• ® is the trademark symbol used in the
U.S.
Visit the United States Patent
and Trademark Office
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Why Brands Matter
 Brand equity:
A brand’s value to its organization over
and above the value of the generic
version of the product
 Brand equity provides competitive
advantage
 Brand equity results in brand loyal
consumers and attachment
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Table 9.1
Dimensions of Brand Meaning
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Why Brands Matter

Brand storytelling:
• Marketers seek to engage consumers with
compelling stories about brands
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Characteristics of world class brands
Brand extensions:
• New products sold with the same
brand name
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Sub-branding:
• Creating a secondary brand within a main
brand that can help differentiate a product line
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Figure 9.6
Branding Strategies
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Branding Strategies
 Individual brands
vs. family brands
• Family brands
such as
Campbell’s
provide an
umbrella under
which multiple
products can be
marketed
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Branding Strategies
 National vs. store brands
• Store brands (private label brands) are
exclusive to a given retailer
 Generic brands
 Licensing:
• One firm sells the right to another to
use a legally protected brand name for
a specific purpose and for a specific
period of time
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Branding Strategies
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Co-branding:
• Two brands combine
•
•
to create a new
product
Provides greater
recognition or other
strengths than either
could achieve alone
Ingredient branding
is increasing
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Brand Metrics
 Approaches to measuring brand equity:
• Customer mind-set metrics
• Product-market outcomes metrics
• Financial market metrics
• Revenue premium metric
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Figure 9.7
Functions of Packaging
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Designing Effective Packaging
 Effective
packaging
considers:
• Packaging of
other brands
in same
product
category
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Designing Effective Packaging
 Effective packaging also considers:
• Choice of packaging material and image
it projects
• Environmental impact of packaging
• Shape and color influences on image
• Graphic information to be portrayed
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Labeling Regulations

Federal Fair Packaging and Labeling Act of
1966:
• Aims at making labels more helpful to
consumers by providing useful information

Nutrition Labeling and Education Act of 1990
• Require food labels to state how much fat,
saturated fat, cholesterol, calories,
carbohydrates, protein, and vitamins are in
each product serving
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Figure 9.8
Three Types of Product
Management
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Organizing for New-Product
Development
 Venture teams:
• Specialists in different areas who work
together to focus on new-product
development
 “Skunk works”:
• Small and isolated group in remote
location that function with minimal
supervision
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Real People, Real Choices:
Decision Made at General Mills
 David chose option 2
• Why do you think that David chose to
position Fiber One as a great-tasting,
fiber product?
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Keeping It Real: Fast-Forward to
Next Class Decision Time at 76ers
 Meet Lara Price, Sr. VP of Business
Operations for the Philadelphia 76ers
 The 76ers are a professional basketball
team within the NBA
 The decision to be made:
What method should be used to
compile more detailed information
about the customer base?
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written permission of the publisher. Printed in the United
States of America
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